COMMENT The restaurateurs and estate agents of Kensington and the Upper West Side must be quaking. Eight months after the credit squeeze began, there are now warnings that 10,000 jobs will go in London’s financial district this year; Wall Street companies have already dismissed some staff. But while bankers may not be splashing out this year, doom-mongers may be surprised.
Banks and brokers are a leveraged play on underlying economies and markets: if there is a recession or a market crash, financiers will lose their jobs accordingly. Volatility in their own employability is one cost of bankers’ lucrative rewards but, unless there is a deep financial depression, the money men are likely to muddle through. That is especially true in centres such as London and Hong Kong that are less exposed to the US economy.
